The US is home to over 32 Revenue-Based Financing (RBF) companies collectively managing 57+ distinct funds totaling more than $4.31 billion in capital.
This growth is driven mainly by the demand for subscription-based payments. Customers are increasingly seeking this option, limiting the need for upfront capital in enterprises, especially in the SaaS and hardware sectors.
Navigating this RBF market, however, can be complex. The challenges stem from the multitude of options, each with different eligibility criteria, application processes, and integration in daily sales workflows. Additionally, factors like financing costs and varying terms and conditions add to the complexity.
In this post, we'll explore three standout RBF solutions:
- Ratio, celebrated for its flexible terms and 0% financing
- Capchase, renowned for its rapid funding process
- Gynger, notable for its expertise in underwriting-based software financing
Our in-depth review of these options will guide you to an informed decision. We aim to help you access the growth capital you deserve as quickly as possible.
Top 3 Revenue-Based Financing Companies
Ratio offers RBF via its product called Boost and sets itself apart by offering true sale based financing via its product called Trade. Capchase is a prominent name in the RBF market, while Gynger extends its services beyond the traditional vendors, catering to buyers as well.
Let’s explore each option in detail:
1. Ratio
With Ratio by their side, SaaS and hardware companies in good health can get upfront cash without dilution or adding debt on the balance sheet, allowing them to focus on growth without worrying about the capital.
Customers love Ratio for its ease of use and flexible financing terms.
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Key Differentiators
- With an impressive $400M credit facility for customer financing, Ratio emerges as a potential option for cash-strapped enterprises.
- Ratio enables robotics companies to provide 'Robotics-as-a-Service' models to their clients. This is a significant advantage for an industry that requires substantial capital investment.
Clients: Barkibu, Bigtincan, Sorting Robotics, Bizaway
Ratio Boost
Ratio Boost helps you close more deals by offering Buy Now, Pay Later (BNPL) flexibility to your customers. BNPL minimizes delayed or lost deals due to short-term budget constraints at the customer end.
You can effortlessly integrate Boost in their sales workflows for easier payment management.
Must Read: 5 Compelling Reasons for B2B SaaS Firms to Opt for Revenue-Based Loans
How does Ratio Boost Work?
To be eligible for capital, your enterprise must show a consistent and predictable recurring revenue stream from contracts lasting at least 12 months.
The cost is determined by a discount rate, factoring in the terms of the contract, risk associated with both buyer and seller, repayment schedule, and other related considerations.
Boost presents three flexible payment options:
- Seller Pays: The seller may cover the financing costs to please customers.
- Buyer Pays: This option allows Ratio to manage balance sheet risk while giving customers flexible payment arrangements.
- Split 50/50: Sellers can juggle cash flow issues and customer retention by dividing fees with buyers. The fee arrangement can be tailored to fit the seller's specific circumstances.
Benefits
- Quick Cash Access: Obtain funds almost instantly, enabling rapid response to financial needs.
- Dynamic Risk Assessment: Boost offers price-based risk evaluation through dynamic underwriting, adapting to the unique aspects of your business.
- Full Ownership: Avoid equity dilution and retain complete control over your company.
- Affordable and Convenient: A more accessible option compared to traditional debt, with no fixed interest rate. Pay based on your monthly revenue, tailoring repayments to your financial situation.
- Contract Flexibility: Select contracts that best suit your cash flow needs, allowing for a more personalized financial strategy.
- Risk Mitigation: Effectively remove specific financial risks from your balance sheet, enhancing overall stability.
Ratio Trade
Ratio Trade enables you to convert annual and multi-year contracts into instant cash without debt, warrant, or dilution.
With Trade, you receive approval in less than 48 hours, and once you accept the offer, you instantly get the capital in your bank account.
How Does Ratio Trade Work?
Ratio Trade operates through five simple steps:
- Connect your banking, financial, and billing systems via the Ratio Portal
- Await Ratio's review of your submission, with approval or decline typically occurring within 48 hours
- Upload your annual or multi-year contracts
- Receive an indicative cash offer from Ratio for each of your contracts
- Accept the offer and enjoy the cash deposited in your account!
Pricing
It is determined by the discount rate ranging from 1% - 15%, contingent on factors like contract terms, risk of the contract, repayment schedule, etc.
Benefits
- Pay only after receiving payments from customers
- No monthly payment is required
- No restriction on the usage of funds
- No cumbersome and manual reporting requirement, allowing you to focus on what matters for your business
- Extends runway capital
Integrations: The platform provides integration options with popular accounting, banking, and payment tools, including:
- Accounting: Freshbook, Quickbook, KashFlow, Xero
- Payment: Stripe, Recurly, Chargebee, and more
- Banking: Plaid
Calculators/Tools: Ratio offers an ARR-based funding comparison calculator for ease in decision-making.
2. Capchase
Capchase is a popular fintech company specializing in RBF, offering solutions tailored to support the various growth needs of SaaS companies.
Empowering SaaS businesses to access upfront cash, Capchase removes all barriers to growth capital and budget constraints.
Products: It offers Capchase Pay, a BNPL solution, and Capchase Grow to provide growth capital without equity dilution.
Capchase Pay offers flexible payment terms to your customers that fit monthly, biannually, or annually as per their needs.
Capchase Grow, on the other hand, offers no-strings-attached non-dilutive growth capital.
Key Differentiators
- Strong customer base - trusted by 4,000+ enterprises
- Capchase Analytics - You can monitor key metrics and obtain industry reports, including Benchmark Reports and Pulse of SaaS.
- Exclusive community - You receive support from a dedicated growth advisor and enjoy unique events like first-generation founders meetups and SaaS investor dinners.
Clients: Fondo, CIENCE, Audisense, IOTAP
How Does Capchase Pay Work?
Here is a brief overview of how Capchase works:
- Payment terms: Typically spans from 12-36 months
- Eligibility Criteria: To qualify, companies should have a steady recurring cash flow, a minimum of 3+ months of runway, $250k-100m+ ARR, and a revenue history of 6+ months
- Pricing: It depends on various factors, like the company's creditworthiness, the amount of financing, payment schedule, etc.
Benefits of Capchase Pay
- Extend runaway time or reduce time-to-revenue
- Withdraw and spend as per your needs
- Boost top-line metrics by eliminating the need for discounting
Integrations: Broad integration options are available for accounting, banking, and payment, including Plaid, Xero, Freshworks, Recurly, Chargebee, Stripe, etc.
Tools/Calculators: Offers access to Runway calculator, ARR Calculator, and SaaS benchmark calculator
Check out Ratio v. Capchase to understand the nitty-gritty of the two solutions.
3. Gynger
Gynger provides tailored solutions for both vendors and buyers in the SaaS and infrastructure industries.
For vendors, Gynger enables the offering of flexible payment options to customers, enhancing purchasing accessibility.
Meanwhile, Gynger for Buyers ensures that companies facing short-term budget constraints can pay for their SaaS and infrastructure needs without compromising vendor payments.
Key Differentiators
- Sharp focus on short-term capital needs for software tech stack and infrastructure
- Fast underwriting within minutes
- Swift payment of the total cost of the software contract upfront within a single business day
Clients: Lovd, Datadog, Airtable, Secureframe, GCP, AWS, Amplitude, Slack
How Does Gynger for Vendors Work?
- Gynger creates a tailored payment portal for your company.
- Share the portal with potential or renewing customers seeking payment flexibility.
- Customers are directed to an easy application to apply for financing and choose custom terms.
- Gynger pays you the full contract value the next business day, while customers pay monthly.
Benefits of Gynger for Vendors
- Drive More Revenue: Upsell with flexible financing over 3-12 months.
- Generate Qualified Leads: Build a pipeline with payment flexibility.
- Accelerate Sales Cycle: Close deals quickly through finance options for budget-constrained prospects.
- Improve Retention: Increase Net Retention by offering finance options to existing customers.
Ratio: A Promising RBF Solution
Ratio offers RBF through Boost and true sale based financing via Trade.
Boost draws in customers by providing a BNPL feature. It also easily integrates into your sales process. Financing costs can be handled by sellers, buyers, or split between them. Here, Ratio takes on the underwriting risk.
Trade, meanwhile, lets businesses turn future contracts into immediate cash. This offers stable, rapid capital within hours.
Whether you choose Boost or Trade, Ratio is a dependable partner. Their easy-to-use interfaces handle your financing requests in minutes.
See how Nextech3D.ai, a supplier of AI-focused 3D models, accessed $2 million in non-dilutive funding through Ratio. This investment against future invoices has aided Nextech3D.ai's growth, enhancing financial flexibility without giving up equity.
Unlock growth with Ratio's financing. Register on the app today!
